39 Layoffs for O.C.’s Planning Agency

On the day that 39 Orange County Planning Department employees were laid off, an attorney said Wednesday the agency’s top ranking fiscal manager had been cleared of any wrongdoing and will return to work after four months on paid leave.

The actions intensify questions about the financial crisis at the Planning Department, which faces a deficit of at least $2.5 million and continues to spend $500,000 more than it can afford each month, according to court and budget documents.

Planning and Development Services Department Director Tom Mathews promised the Board of Supervisors in August that an outside auditor would complete a review of the department’s finances in September. That review was delivered to supervisors behind closed doors, without public review, on Sept. 24.

Meeting records show that the board took no action on the information.

County Auditor-Controller David Sundstrom said he has now sent in his staff to investigate the beleaguered agency’s books.

Mathews could not be reached for comment.

Separately, attorney Paul Crost said that Vicki Stewart, manager of fiscal and program services for the Planning Department, was informed Dec. 3 that an investigation had been completed and that she could return to work. Stewart and her chief fiscal analyst were placed on paid administrative leave in August, after a $2.5-million hole in the department’s budget became public.

Crost represents county managers in collective bargaining. He said Stewart planned to return to work after the holidays. He did not know the status of the second manager.

The laid-off employees include 14 veteran building inspectors -- more than a third of the county’s inspectors -- and six high-ranking planners, moves that will have a devastating effect on development projects, said Nick Berardino, assistant manager for the Orange County Employees Assn. The union has also hired an auditor and may sue to stop the layoffs unless the county can prove financial necessity.

More than three dozen employees met with the county’s head of personnel Wednesday and were told their last day of work would be Jan. 9, according to Berardino. A few may be reassigned to other departments, he said. County spokeswoman Diane Thomas confirmed that there were 39 layoffs and that attempts would be made to help with job placement. She could not provide more details.

Mathews was not at the meeting. In an e-mail to his employees Dec. 5, , he blamed the layoffs on an unexpected sharp decline in revenues from building permit fees and build-out of unincorporated county land.

Berardino described Wednesday’s meeting as “not only sad, but heartbreaking, because it was reliving the [1994 county] bankruptcy tragedy all over again. Once again, it is top managers who can’t explain the finances, and employees who are paying the price.... It is a department head who has run that department into the ground, and innocent employees who came to work each day to do their job who are the victims.”

Berardino said Mathews had told employees in recent months that layoffs would not be necessary.

He said Mathews met twice with union officials and employee representatives last week but did not provide details about the department’s finances. The fee issue has been tied up in lawsuit against the department and there exists the possibility of a second suit by the union. Barratt American Inc., a national home builder, sued the department in 1999, saying improperly high permit fees were being charged.

The department reduced fees and gave some refunds but has paid a large chunk of its expenses in the last two years from an $18-million cushion it had piled up from the fees. That reserve has been depleted.

In additional to the layoffs, Mathews has proposed increases in permit fees of more than 50% to balance the department’s budget. The Board of Supervisors on Tuesday delayed action on the fee hike.